Crossing the bridge to poverty, with low‐cost cars

Abstract

Purpose The purpose of this study is to examine which changes companies need to implement in their transactional marketing strategy to sell to the poor when launching a product innovation in low‐income countries. Design/methodology/approach The paper confronts the literature on the “bottom of the pyramid” with the diffusion of innovations theory in order to identify the country characteristics that call for marketing changes when entering low‐income markets. The authors investigate for one case (the Tata Nano) whether – and how – the company implements changes to respond to these conceptually identified challenges. The case study is systematically analysed and structured according to Kotler's four Ps. Findings The case shows that companies can create products with functionality and cost advantage for the poor without compromising on safety and comfort. Creating an innovative distribution system pushes costs and builds trust between the company and the customer. Research limitations/implications The study examines one case from the automobile industry. Marketers would benefit from multiple case studies. Originality/value The study's originality springs from the confrontation between the bottom of the pyramid and the diffusion of innovations theories. The study is valuable to marketers targeting the bottom of the pyramid. The case study is interesting because the industry (automobile) surprisingly targets a poorer non‐traditional customer base (the upper bottom of the pyramid).

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